Legal Netflix still notflix in Australia

Despite reports of hundreds of thousands of Australians illegally accessing US streaming video giant Netflix to watch content at prices far cheaper than a Foxtel subscription, Australians are unlikely to see Netflix launch locally until mid-2015.

Last week, Smarthouse exclusively reportedthat Netflix executives had just visited Australia, discussing the potential launch of an Australian version of Netflix either in Feburary 2015, or potentially as late as July 2015 - depending on negotiations.

Issues surrounding any local Netflix launch revolve around the content that Netflix will offer Australians, with the local content library expected to be far smaller than is available on the US offering.

Netflix is also up against existing competitors Eziflix, Quickflix and Australia's major pay television provider, Foxtel, which streams video via its own Foxtel Go, Foxtel Play and Presto offerings.

An Australian Netflix launch would cause issues with Netflix-created content currently appearing on Foxtel, such as its popular House of Cards and Orange is the New Black TV series, alongside giving content owners headaches over which streaming services to license their content to.

Any local Netflix launch will also clash with the Nine Network's planned "StreamCo" online streaming video service, also due to launch next year, putting yet more pressure on content licensing pricing.

This could end up in an intense content bidding war that could push up prices for exclusive content, as was seen with the popular Game of Thrones Season 4, which Foxtel reportedly paid $10 million to secure for the Australian market.

Not only did this lock out competitors such as iTunes from selling the show episode by episode while the show aired on Foxtel, it saw Foxtel able to charge a premium to some of its customer base for access to the show.

The impending local launch also raises the question over whether existing Australian Netflix customers will switch to local service, which is expected to have less content, or to sneakily remain with the US service where content is more plentiful, and monthly access prices are likely to remain cheaper than any Australian subscription price.